Natural disasters caused $270 billion in damage globally by 2021. Of that, $111 billion is covered by insurance. There have been more than 50 severe floods alone with over $80 billion in economic losses. In Europe, the July floods caused the most expensive natural disaster ever on this continent.
This means that damage from natural disasters was much greater last year than it was in 2020, when it was still about US$203 billion. This is clear from the report Natural disasters of 2021: the floodgates open From the Swiss Reinsurance Institute, part of the Swiss Re Group. $270 billion is no exception. In another three years since 1970, the amount has been even higher.
In total, there were 306 catastrophic events classified as natural disasters. Hurricane Ida, which wreaked havoc on America, is by and large the costliest disaster. Insured damage alone is estimated to be between $30 and $32 billion. Tropical cyclones collectively account for 33 percent of total damage worldwide. Soon, a major flood of 31 percent followed.
Europe’s most expensive natural disaster ever
An unwanted record was broken in Europe. The July 2021 floods, which severely affected Belgium, Germany and Limburg, among other countries, are the most expensive natural disaster ever in this part of the world, according to the Swiss Re Institute. Economic losses amounted to about 40 billion dollars, a third of which is insured. In the ten years before that, floods had caused an estimated $10 billion in damage to Europe.
Floods are the most common natural disaster in the world. Last year, there were more than 50 severe floods, including in Australia, China and the United States. The number of floods in the past decade was about three times the number of tropical cyclones. Last year, major floods caused a third of the 8,200 total deaths due to natural disasters.
Flood losses are increasing
The growing losses from the floods are becoming increasingly evident, said Swiss Re Group’s chief economist, Jerome Jean Heigley. “Last year we had another wake-up call. There is an increasingly urgent need to take action to increase the resilience of communities around the world.”
According to Hegeli, insurance and reinsurance companies, along with the public sector, can reduce development in high-risk areas and also invest in protection measures such as green infrastructure. “This keeps assets insurable while improving growth prospects.”
The Swiss Re Institute report notes the impact of climate change in general. This leads to more frequent and extreme weather phenomena. In addition, population growth, rapid urban development and the accumulation of economic wealth in disaster-prone areas contribute to increased economic losses from natural disasters.
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Swiss Re-Institut Report
